Key Points
- California regulators approved Verizon’s nearly $10 billion acquisition of Frontier with conditions tied to network expansion.
- Verizon must deploy fiber to 75,000 locations, build new wireless sites and offer $20 broadband to low-income households.
- The approval clears the final hurdle for closing the deal, expected on January 20.
Utility regulators in California have approved Verizon’s propose nearly $10 billion acquisition of peer broadband provider Frontier Communications, though the green light comes with a few strings attached.
On Thursday, the California Public Utilities Commission (CPUC) unanimously approved the acquisition after a year-long process, during which nearly every element of Verizon and Frontier’s existing businesses were scrutinized.
The deal requires Verizon to deploy its fiber-based Internet to more than 75,000 new locations in the state within the next five years — Verizon doesn’t currently offer its residential Fios service anywhere in California, but does offer wireless 5G home Internet in some communities.
Verizon must also build more than 200 new wireless transmission sites for cellular services, including fixed-wireless access (FWA) transmission points for its 5G home Internet product. Verizon committed a $150 million bond to California regulators to back those promises, the CPUC said.
Regulators also required Verizon to commit to a 10-year period of offering $20 broadband Internet service to low-income households in California, and transitioning most of Frontier’s copper-based infrastructure to newer fiber lines. Those upgrades will primarily happen in small markets and rural areas of California, with Verizon committing to provide download speeds in line with federal broadband definitions.
In employment, Verizon said it will commit to aligning its business in California with the state’s various requirements under its diversity, equity and inclusiveness (DEI) laws, though the company ended its employment-based DEI initiatives last year in order to secure approval from the Federal Communications Commission (FCC) for its purchase of Frontier.
The DEI commitments Verizon will make are not expected to conflict with its promises to the FCC, which largely involved hiring and promotional practices. On the hiring front, Verizon said it will onboard hundreds of union-backed workers in California over the next several years.
The approval from California regulators was the last hurdle Verizon needed to overcome before closing on its acquisition of Frontier. The companies said the deal is now expected to be complete on January 20.
“Upon closing, we will be uniquely positioned to offer our customers the best combined mobility and fiber experience for mobile, home internet, and other essential services across a significantly expanded footprint,” Dan Schulman, the CEO of Verizon, said in a statement.
The approval was a rare bit of good news for Verizon in what was otherwise a challenging week. On Wednesday, the company suffered from a prolonged outage of its wireless service in several metropolitan areas of the country, with some customers unable to access Verizon’s wireless service for as long as 10 hours.
Verizon has not revealed a cause for the outage, but said it would credit most affected customers $20 on their next bills. Customers have to apply for those credits.
